TRANSGLOBE ENERGY CORPORATION

Virtual Only Meeting via Webcast at https://web.lumiagm.com/279914576

Website: www.trans-globe.com

NOTICE OF THE ANNUAL GENERAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 11, 2022

TO THE HOLDERS OF COMMON SHARES

Notice is hereby given that the Annual General Meeting (the "Meeting") of the holders (”Shareholders") of common shares ("Common Shares") of TransGlobe Energy Corporation ("TransGlobe" or the "Company") will be held on Wednesday, May 11, 2022, at 9:00 a.m. (Calgary time), for the following purposes:

The nature of the business to be transacted at the Meeting is described in further detail in the Information Circular.

The record date for the determination of Shareholders entitled to receive notice of and to vote at the Meeting is March 23, 2022 (the "Record Date"). Shareholders of the Company whose names have been entered in the register of Shareholders at the close of business on the Record Date will be entitled to receive notice of and to vote at the Meeting, provided that, to the extent a Shareholder transfers the ownership of any of such Shareholder's Common Shares after such date and the transferee of those Common Shares establishes that the transferee owns the Common Shares and requests, not later than 10 days before the Meeting, to be included in the list of Shareholders eligible to vote at the Meeting, such transferee will be entitled to vote those Common Shares at the Meeting.

You will not be able to attend the Meeting physically. A virtual-only meeting format is being adopted to give all Shareholders an equal opportunity to participate at the Meeting regardless of their geographic location. We are not aware of any items of business to be brought before the Meeting other than those described in the enclosed Meeting materials.

The Meeting can be accessed by logging in online at https://web.lumiagm.com/279914576. As described in the enclosed Meeting materials (which are also accessible electronically, as set out below), registered Shareholders are entitled to participate at the Meeting if they held their Common Shares as of the close of business on the Record Date.

The persons named in the enclosed form of proxy are directors and/or officers of the Company. Each Shareholder has the right to appoint a proxyholder other than such persons, who need not be a Shareholder, to attend and to act for such Shareholder and on such Shareholder's behalf at the Meeting. To exercise such right, the names of the nominees of management should be crossed out and the name of the Shareholder's appointee should be legibly printed in the blank space provided, or if voting through the internet, the name of the Shareholder's appointee should be included in the applicable field. Non-registered (beneficial) Shareholders who wish to vote at the Meeting will be required to appoint themselves as proxyholder in advance of the Meeting by writing their own name in the space provided on the voting instruction form provided by their intermediary, generally being a bank, trust company, securities broker, trustee or other institution. In all cases, Shareholders must carefully follow the instructions set out in their applicable proxy or voting instruction forms AND those set out below under “How to Participate at the Meeting”.

Registered Shareholders and duly appointed proxyholders (including beneficial Shareholders who have duly appointed themselves as proxyholders) who participate at the Meeting online will be able to listen to the Meeting, ask questions and vote, all in real time, provided that they are connected to the internet. Guests, including non-registered Shareholders who have not duly appointed themselves as proxyholder, can log in to the Meeting as set out below, under “How to Participate at the Meeting”. Guests can listen to the Meeting but will not be able to communicate or vote. Shareholders will not be able to attend the Meeting physically.

Shareholders who are unable to attend the Meeting or any postponement or adjournment thereof are requested to date, sign and return the accompanying form of proxy for use at the Meeting or any postponement or adjournment thereof. To be effective, the enclosed proxy must be mailed so as to reach or be deposited with the Company's transfer agent and registrar, Odyssey Trust Company ("Odyssey"): (i) by mail using the enclosed return envelope or one addressed to Odyssey Trust Company, Trader’s Bank Building, 702 67 Yonge Street, Toronto, Ontario, M5E 1J8 Attention: Proxy Department; (ii) by hand delivery to Odyssey Trust Company, Trader’s Bank Building, 702 67 Yonge Street, Toronto, Ontario, M5E 1J8 Attention: Proxy Department; or (iii) through the internet at

https://login.odysseytrust.com/pxlogin (detailed instructions are included with your proxy materials) and follow the instructions in each case not later than forty-eight (48) hours (exclusive of Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the time of the Meeting or any postponement or adjournment thereof.

The instrument appointing a proxy shall be in writing and shall be executed by the Shareholder or the Shareholder's attorney authorized in writing or, if the Shareholder is a corporation, under its corporate seal by an officer or attorney thereof duly authorized.

In the event of a strike, lockout or other work stoppage involving postal employees, all documents required to be delivered by a Shareholder of the Company should be delivered by facsimile to Odyssey at 1-800-517-4553.

How to Participate at the Meeting

Registered Shareholders may vote at the Meeting by completing their proxy in advance of the Meeting or by completing a ballot at the Meeting that will be made available online during the Meeting, as further described below.

If you are a registered Shareholder and wish to appoint a third party proxyholder to vote on your behalf at the Meeting, you must appoint such proxyholder by inserting their name in the space provided on the form of proxy sent to you and follow all of the instructions therein, prior to the prescribed deadline noted below. If you vote through the internet, you may also appoint a third party proxyholder by going to https://login.odysseytrust.com/pxlogin and following the instructions. Registered Shareholders wishing to appoint a third party proxyholder (other than the TransGlobe proxy nominees) must ALSO register their proxyholders at https://login.odysseytrust.com/pxlogin.  Shareholders in the U.S. wishing to appoint a third party proxyholder (other than the TransGlobe proxy nominees) must ALSO register their proxyholders at transglobe@odysseytrust.com.

Non-registered (beneficial) Shareholders who have not duly appointed themselves as proxyholder will not be able to vote or communicate at the Meeting but will be able to participate as a guest. This is because the Company and our transfer agent, Odyssey, do not have a record of the non-registered Shareholders, and, as a result, have no knowledge of non-registered shareholdings or entitlements to vote unless non-registered Shareholders appoint themselves as proxyholder. If you are a non-registered Shareholder and wish to vote at the Meeting, you must first appoint yourself as proxyholder by inserting your own name in the space provided on the voting instruction form sent to you and follow all of the applicable instructions, prior to the prescribed deadline provided by your intermediary AND then register yourself as proxyholder at transglobe@odysseytrust.com. After you register, Odyssey will provide you with a Control Number via email. Please contact your stockbroker or other intermediary as soon as possible to determine what additional procedures must be followed to appoint yourself or a third party as your proxyholder (including whether to obtain a separate valid legal form of proxy from your intermediary if you are located outside of Canada).

In all cases, all proxies must be received and all proxyholders must be registered before 9:00 a.m. (Calgary time) on May 9, 2022 or, in the case of any adjournment or postponement of the Meeting, not less than 48 hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the time fixed for the adjourned or postponed Meeting in order to participate and vote at the Meeting. The Meeting will be held in a virtual-only format and can be accessed by logging in online at https://web.lumiagm.com/279914576. We recommend that you log in at least 30 minutes before the Meeting begins as follows:

• Click “Login” and then enter your Control Number (see below) and Password “transglobe2022” (case sensitive); OR

• Click “Guest” and then complete the online form.

If you are a registered Shareholder, the control number located on the form of proxy is your Control Number. If you duly appoint a third party proxyholder, Odyssey will provide such proxyholder with a Control Number by e-mail after the proxy voting deadline has passed and the proxyholder has been duly appointed AND registered as described above. The Password for duly appointed proxyholders is “transglobe2022”.  Registration of third party proxyholders as described above is an additional step that must be completed in order for proxyholders to attend and participate at the Meeting. Without a Control Number, proxyholders will not be able to participate at the Meeting but will be able to listen as a guest.

If you attend the Meeting online and you are a registered Shareholder or proxyholder and wish to vote at the Meeting, it is important that you remain connected to the internet at all times during the Meeting in order to vote when balloting commences. It is your responsibility to ensure connectivity for the duration of the Meeting.  You should allow ample time to check into the Meeting online and complete the related procedures. Shareholders with questions regarding the virtual Meeting portal or requiring assistance accessing the Meeting website may contact Odyssey via the following number(s):587-885-0960 or toll free at 1-888-290-1175.

DATED at Calgary, Alberta this 8^th day of April, 2022.

CHAIR'S LETTER TO SHAREHOLDERS

Fellow Shareholders:

This past year was a seminal moment for TransGlobe where the Company received the Egyptian Parliament's ratification of the agreement to merge, amend and extend its three Eastern Desert concessions on December 19, 2021 (the “Merged Concession Agreement”), while also confirming the value potential of the South Harmattan lands in Canada.  

The Merged Concession Agreement is a game-changer for TransGlobe in Egypt. The new terms significantly enhance the Company’s value potential in Egypt with greater strength to downside prices and enhanced cash flow at higher prices. This new platform, from which the Company may now operate profitably in Egypt, was developed by TransGlobe’s management team through a shared creative vision, and delivered to its successful conclusion through patience, stamina and determination. The Merged Concession Agreement’s structure has since been imitated by several companies operating in Egypt, some of which are substantially larger than TransGlobe.

We have seen further success in 2021 through confirming the potential of our Canadian assets, specifically the South Harmattan lands, through positive drilling results.  The Company utilized the time afforded by years of depressed commodity prices to purposefully enhance the subsurface prospects of the Canadian lands. They are now beginning to take a form within the Company that can create a reliable baseline cash flow. This value creation enhances our ability to provide future distributions to our shareholders.    

Troubling for all, the COVID-19 pandemic continued to present challenges around the world for yet another year. TransGlobe continued to prioritize efforts to safeguard our people.  As the pandemic evolved, we adjusted and adapted the way we worked in order to minimize the COVID-19 risk to our people, contractors and communities, while maintaining business continuity. Despite the challenges of operating during a pandemic, the Company continued to execute on a long-term strategic direction that focuses on growing funds flow and net asset value, all the while maintaining notable balance sheet discipline.

Today, further enhanced by the trend toward economic and price recovery, the Company is in a strong financial position. We have continued to repay debt, decreasing total long-term debt (including the current portion) to under $5 million by year-end 2021. Meanwhile, the Company had over $37 million in unrestricted cash on the balance sheet as of December 31, 2021. These results have been achieved without an equity offering since January 2011.

The Company has advanced our agenda supporting governance and social responsibility over the last number of years under the leadership and direction from the CHR&G and RHSES Committees. The Company is committed to operating with the highest degree of governance and responsibility in all areas of corporate activity, including Environmental, Health and Safety. TransGlobe continues to put a substantial amount of focus on implementing best-in-class governance. The Company has published its Environmental, Social and Governance compliance data (contained in our sustainability report) in our 2020 and 2021 annual reports.

We focus on maintaining our "human focus” across the Company.  Even with the COVID-19 pandemic's impact, we are actively involved in the communities where we operate. TransGlobe continues to support certain local employee-selected charities and encourages employee involvement in charitable organizations. The Company supports our staff’s participation in the Corporate Social Responsibility committee, a sub-committee of the Egypt Oil and Gas Technical Committee, which co-ordinates IOC support in this area and is fully engaged in the Ministry of Petroleum’s modernization program. We support and will work closely to advance sustainable corporate social responsibility programs where the Company works and lives, as we recognize the positive impact of such efforts reverberate even further.

During the past few years TransGlobe worked to distinctly weather the periods of economic and price downturn. The resulting outcomes have given us a solid foundation, now enhanced by a forward view of recovery and higher prices. On this solid view of our future, we announced on March 16, 2022, the decision to amend our distribution policy. Returns to shareholders will be a priority going forward.

It takes concerted and unwavering efforts to safely and successfully guide the Company and people through challenges as we have endured in 2020 and 2021. I personally want to thank all of the TransGlobe team, as well as the Board of Directors, for their diligent efforts on behalf of all of our shareholders. Even through such trying times, TransGlobe’s dedicated professionals are progressing the Company’s strategy to enhance profitability in Egypt and Canada. Simultaneously, we continue assessing other value-creating opportunities to enhance shareholder returns.

We are looking forward to the annual general meeting (the ”Meeting”) of shareholders to be held on May 11, 2022, at 9:00 AM (Calgary time).  In light of the continuing concerns over the COVID-19 pandemic, and to mitigate against unnecessary risks, the Meeting will be held in a virtual-only meeting format. The Meeting can be accessed by logging in online at https://web.lumiagm.com/279914576. Please read the material on TransGlobe‘s website. Whether through the Meeting or otherwise, we always welcome any suggestions and comments whereby we can improve delivery of information to our shareholders and the market.

(signed) “David Cook”

David Cook

Chair

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TRANSGLOBE ENERGY CORPORATION

MANAGEMENT INFORMATION CIRCULAR

For the Annual General Meeting of Shareholders to be held on May 11, 2022

This management information circular ("Information Circular") is furnished in connection with the solicitation of proxies by management of TransGlobe Energy Corporation ("TransGlobe" or the "Company") for use at the annual general meeting (the "Meeting") of the holders ("Shareholders") of common shares ("Common Shares") of TransGlobe to be held virtually at https://web.lumiagm.com/279914576, on Wednesday, May 11, 2022, at 9:00 a.m. for the purposes set forth in the accompanying Notice of Meeting.

This Information Circular is dated April 8, 2022. Unless otherwise stated, the information contained in this Information Circular is given as at the close of business on March 23, 2022 (the “Record Date”).

No person has been authorized by the Company to give any information or make any representations in connection with the transactions herein described other than those contained in this Information Circular and, if given or made, any such information or representation must not be relied upon as having been authorized by the Company.

Although the Common Shares are registered with the U.S. Securities and Exchange Commission (the "SEC") under the U.S. Securities Exchange Act of 1934, as amended (the "1934 Act"), and the issued and outstanding Common Shares are listed and posted for trading on the National Association of Securities Dealers' Automated Quotation ("NASDAQ") system, the Company is a "foreign private issuer" as defined in SEC Rule 3b-4, and is therefore exempt from the SEC's proxy access, formatting and filing requirements. The Common Shares are also listed on the AIM market operated by the London Stock Exchange plc (the "AIM"). Beneficial holders who hold their Common Shares through the depositary ("Depositary Interests"), Computershare Investor Services plc (the "Depositary"), should refer to Advice to Beneficial Shareholders set forth herein.

This Information Circular complies with the Canadian requirements for management information circulars.

These securityholder materials are being sent to both registered and non-registered owners of Common Shares and holders of Depositary Interests. If you are a non-registered owner of Common Shares, and the Company or its agent has sent these materials directly to you, your name and address and information about your holdings of securities have been obtained in accordance with applicable securities requirements from the intermediary holding on your behalf.

ADVISORIES

Notes:

⁽¹⁾  "Held" means beneficially owned, controlled, or directed, directly or indirectly.

⁽²⁾  For greater clarification, "Securities Held" includes Common Shares and DSUs (all DSUs are settled in cash in Canadian dollars).

⁽³⁾  Mr. Cook was appointed to the Audit Committee on August 5, 2021 and attended one of the two Audit Committee meetings since his appointment. Mr. Cook ceased to be a member of the Audit Committee effective January 20, 2022.

Notes:

⁽¹⁾  "Held" means beneficially owned, controlled, or directed, directly or indirectly.

⁽²⁾  For greater clarification, "Securities Held" includes Common Shares and PSUs (all PSUs are settled in cash in Canadian dollars).

⁽³⁾  Mr. Neely was unable to attend one Board Meeting due to a medical emergency.

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Notes:

⁽¹⁾  "Held" means beneficially owned, controlled, or directed, directly or indirectly.

⁽²⁾  For greater clarification, "Securities Held" includes Common Shares and DSUs (all DSUs are settled in cash in Canadian dollars).

⁽³⁾  Mr. Clarkson was appointed as a member of the Audit Committee effective March 25, 2022.

Notes:

⁽¹⁾  "Held" means beneficially owned, controlled, or directed, directly or indirectly.

⁽²⁾  For greater clarification, "Securities Held" includes Common Shares and DSUs (all DSUs are settled in cash in Canadian dollars).

⁽³⁾  Ms. Kaufield was appointed to the Board of Directors on January 1, 2022 and appointed Chair of the Audit Committee effective March 25, 2022.

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Notes:

⁽¹⁾  Held" means beneficially owned, controlled, or directed, directly or indirectly.

⁽²⁾  For greater clarification, "Securities Held" includes Common Shares and DSUs (all DSUs are settled in cash in Canadian dollars).

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Cease-Trade Orders, Bankruptcies, Penalties or Sanctions

No proposed Director of the Company has, as at the date of this Information Circular or within the last 10 years prior to the date of this Information Circular, been a director, chief executive officer or chief financial officer of any company (including the Company) that, while such person was acting in that capacity: (i) was the subject of a cease-trade or similar order or an order that denied the company access to any exemption under securities legislation for a period of more than 30 consecutive days; or (ii) was subject to an event that resulted, after the director, chief executive officer or chief financial officer ceased to be a director, chief executive officer or chief financial officer, in the company being the subject of a cease-trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days; or (iii) while that person was acting in the capacity or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver-manager or trustee appointed to hold its assets.

No proposed Director of the Company has, within the 10 years before the date of this document, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver-manager or trustee appointed to hold its assets.

In addition, no proposed Director has been subject to: (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed Director.

Appointment of Auditors

At the request of the Company, BDO Canada LLP ("BDO"), resigned as the Company's auditor effective April 8, 2022. Deloitte LLP ("Deloitte") was appointed as the auditor of the Company effective April 8, 2022 to fill the vacancy created by BDO’s resignation. Additional documents related to the change of auditor, being the Change of Auditor Notice and the acknowledgments of that notice by BDO and Deloitte, are set out in Schedule E to this Information Circular.  There were no "reportable events" within the meaning of National Instrument 51-102 – Continuous Disclosure Obligations ("NI 51-102"). Unless otherwise directed, it is management's intention to vote the proxies in favour of an ordinary resolution to appoint Deloitte to serve as auditors of the Company until the next annual meeting of Shareholders and to authorize the Directors to fix their remuneration as such.

The Audit Committee reviews the annual audit fees and considers the issue of auditor independence in the context of all services provided to the Company.

Certain information regarding the Company's Audit Committee, including the fees paid to the Company's auditors in the last fiscal year, that is required to be disclosed in accordance with National Instrument 52-110 - Audit Committees ("NI 52-110") is contained in the Company's annual information form for the year ended December 31, 2021, an electronic copy of which is available on the internet on the Company's SEDAR profile at www.sedar.com.

The Board unanimously recommends that the Shareholders vote "FOR" the appointment of Deloitte LLP as auditors of the Company and to authorize the Directors to fix their remuneration as such.

Advisory Vote on Executive Compensation (Say on Pay)

The Company is committed to continually enhancing its corporate governance practices and places a high importance on facilitating regular and constructive dialogue with Shareholders. One method of Shareholder engagement TransGlobe uses is a "Say on Pay" advisory vote on the Company's approach to executive compensation, providing Shareholders with an opportunity to express their satisfaction with the Company's approach to executive compensation.  TransGlobe encourages its Shareholders to carefully review the "Compensation Discussion & Analysis" beginning on page 27 of this Information Circular before voting on this matter. The compensation discussion and analysis contained in this Information Circular describes the Company's compensation philosophy, the objectives of the different elements of its compensation programs and the way the Board assesses performance and makes compensation decisions. It explains how TransGlobe's compensation programs are designed to pay-for-performance and are aligned with strong risk management principles and the long-term interests of Shareholders. This disclosure has been approved by the Board of Directors. The following resolution is being proposed to the Shareholders by management of the Company.

"BE IT RESOLVED, on an advisory basis only and not to diminish the role and responsibilities of the Board of Directors, that the Shareholders of the Company accept the approach to executive compensation disclosed in the Information Circular of the Company dated April 8, 2022 delivered in advance of the annual general meeting of Shareholders of the Company to be held on May 11, 2022."

As this is an advisory vote, the results will not be binding upon the Board. However, the Board will consider the outcome of the vote as part of its ongoing review of executive compensation. The Board believes that it is essential for the Shareholders to be well informed of the Company's approach to executive compensation and considers this advisory vote to be an important part of the ongoing process of engagement between the Shareholders and the Board.

The Board unanimously recommends that the Shareholders vote "FOR" the advisory vote on executive compensation.

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

Management of TransGlobe is not aware of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, of any Director or nominee for Director, executive officer ("Executive Officer"), or anyone who has held office as such since the commencement of the last completed fiscal year of the Company, any nominee for election as a Director or of any associate or affiliate of any of the foregoing individuals, in any matter to be acted on at the Meeting, other than the election of Directors and the appointment of auditors.

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Notes:

⁽¹⁾  Fees earned have been paid in Canadian dollars and are translated into U.S. dollars using an average exchange rate for the 2021 reporting year of 1.2535 per U.S. dollar.

⁽²⁾  In accordance with the terms of the DSU Plan, the number of DSUs to be awarded is determined by dividing that portion of the annual retainer which the Director elected to receive in DSUs by the weighted-average trading price of the Common Shares on the TSX for the last five trading days prior to the award date. Further, additional DSUs are credited to the Directors as of each dividend payment date in respect of cash dividends which were paid on Common Shares throughout the fiscal year in accordance with the DSU Plan. The number of additional DSUs credited is determined by dividing: (a) the dividends that would have been paid to the Director if each DSU in the Director's account on the relevant dividend record date had been one Common Share, by (b) the weighted-average trading price of the Common Shares on the TSX for the last five trading days prior to the award date. The fair value of the DSUs disclosed above is equal to the weighted-average value of C$1.85 per DSU. This approach to valuing the DSUs is consistent with the manner in which the DSUs are valued for the Company's financial statements which are in compliance with International Financial Reporting Standards ("IFRS"). All DSUs are settled in cash in Canadian dollars. DSUs are awarded and paid in Canadian dollars and are translated into U.S. dollars using the exchange rate in effect on May 17, 2021 (the grant date) of 1.2081 per U.S. dollar.

⁽³⁾  Ross Clarkson retired as an Executive Officer of the Company on December 31, 2018.  Ross Clarkson exercised Options (as defined herein) in December 2021. The Option grants related to prior years when he held the position of President and Chief Executive Officer.  The exercise was net settled in Common Shares being issued to Mr. Clarkson.

⁽⁴⁾ The Company did not grant any option-based awards, non-equity incentive plan compensation, pension contributions or any other compensation to its Non-Executive Directors in the year ended December 31, 2021.

⁽⁵⁾ Carol Bell did not stand for re-election at the Company’s May 6, 2021 Annual General Meeting. Following thereto, her DSUs were paid out in Canadian dollars in accordance with the DSU Plan.

⁽⁶⁾ Jennifer Kaufield joined the Board of Directors on January 1, 2022, and therefore did not receive any compensation for the year ended December 31, 2021.

⁽⁷⁾  Steven Sinclair retired from the Board effective March 25, 2022.

The breakdown of Non-Executive Director committee chair fees earned included in the above table under "Fees Earned", is as follows:

Notes:

⁽¹⁾  Represents committee chairperson fees paid during the period from January 1, 2021 to December 31, 2021. Fees have been paid in Canadian dollars and are translated into U.S. dollars using an average exchange rate for the 2021 reporting year of 1.2535 per U.S. dollar.

⁽²⁾ The Special Committee was formed in 2020 to oversee and advise on the identification, evaluation and development of potential transactions to enhance the value of the Company's business, including acquisitions, business combinations, joint ventures and other strategic transactions.

⁽³⁾ Carol Bell did not stand for re-election at the Company’s May 6, 2021 Annual General Meeting.

⁽⁴⁾ Steven Sinclair retired from the Board effective March 25, 2022.

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Notes:

⁽¹⁾ All share-based awards represented above are comprised of DSUs. The DSUs vest on grant, are settled in cash in Canadian dollars and are not eligible to be settled in Common Shares. Directors do not hold any unvested share-based awards.

⁽²⁾ Determined by multiplying the total number of DSUs held by each Director by the market price of the Common Shares on December 31, 2021 (C$3.80). These values have been translated into U.S. dollars from Canadian dollars using the closing exchange rate of 1.2678 per U.S. dollar on December 31, 2021.

⁽³⁾ Ross Clarkson is an independent, Non-Executive Director.  As the Chief Executive Officer of the Company until December 31, 2018, he was eligible to receive Options, PSUs and RSUs as a component of his LTIP (as defined herein).  As at December 31, 2021, Mr. Clarkson held 292,696 Options with an exercise price of C$2.62, an expiration date of May 17, 2023 and a market value of $345,381.28 (calculated based on the difference between the market price of the Common Shares at December 31, 2021 of C$3.80 and the exercise price of the Options). Mr. Clarkson did not hold any PSUs or RSUs as at December 31, 2021.

⁽⁴⁾ Carol Bell did not stand for re-election at the Company’s May 6, 2021 Annual General Meeting. DSUs vest upon grant and became payable the day Ms. Bell ceased to be a Director. No DSUs remain unpaid or undistributed to Ms. Bell as at December 31, 2021.

⁽⁵⁾ Steven Sinclair retired from the Board effective March 25, 2022.

Notes:

⁽¹⁾ All share-based awards represented above are comprised of DSUs. All DSUs granted during the fiscal year were vested on the date of grant in accordance with the DSU Plan and can only be redeemed for cash following departure from the Company. The disclosed values were determined by multiplying the number of DSUs granted during the fiscal year by the fair value of the DSUs, as determined using the five-day weighted average prior to grant date. DSUs are awarded in Canadian dollars and are translated into U.S. dollars using the exchange rate on May 17, 2021 (the grant date) of 1.2081 per U.S. dollar.

⁽²⁾ Ross Clarkson is an independent, Non-Executive Director.  As the Chief Executive Officer of the Company until December 31, 2018, he was eligible to receive Options, PSUs and RSUs as a component of his LTIP. Mr. Clarkson exercised Options in December 2021 for a total gain of C$593,184. The Option grants related to prior years when he held the position of President and Chief Executive Officer.  The exercise was net settled in Common Shares being issued to Mr. Clarkson in the amount of 113,448 Common Shares. In addition, Mr. Clarkson was awarded C$70,000 in DSUs during the year ended December 31, 2021 in his capacity as a Director. The share-based awards were awarded in Canadian dollars and are translated into U.S. dollars using the exchange rate on May 17, 2021 (the grant date) of 1.2081. Mr. Clarkson also had 97,565 Options vest during the year ended December 31, 2021 related to prior years when he held the position of President and Chief Executive Officer with a value of $171,634, which value is based on the multiplying the difference between the market price of the Common Shares on the vesting date and the exercise price of the Options by the number of Options which vested on such date. The exercise price of the Options and the market price of

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the Common Shares were in Canadian dollars and are translated into U.S. dollars using the exchange rate on May 18, 2021 (the vesting date) of 1.2051 per U.S. dollar.

⁽³⁾ Carol Bell did not stand for re-election at the Company’s May 6, 2021 Annual General Meeting and was not granted any DSU awards during the year ended December 31, 2021.  As DSUs vest upon grant, no awards vested during the year ended December 31, 2021 in respect of Dr. Bell.

⁽⁴⁾ The Company did not pay, and the Directors did not earn any, option-based awards or non-equity incentive plan compensation during the year-ended December 31, 2021.

⁽⁵⁾ Steven Sinclair retired from the Board effective March 25, 2022.

DSU Plan

The Board approved a DSU Plan (the “DSU Plan”) on May 20, 2014 which permits the granting of DSUs to all Directors of the Company and its related entities ("DSU Participants"). The DSU Plan is administered by the CHR&G Committee as delegated by the Board. Prior to 2014, Directors received grants of Options as part of their annual retainer. As part of the review of Director compensation initiated in 2013, the CHR&G Committee evaluated alternative means of providing compensation to Directors to improve alignment with the Company’s Shareholders and governance best practices. Following this review, the CHR&G Committee recommended and the Board approved a DSU plan for Directors to fully replace the use of Options. Directors may elect to receive all or a portion of their annual retainer payable to them in DSUs.

Each DSU Participant has the right to elect, at any time prior to December 15^th of each year, to be credited with DSUs in lieu of all or any part of the annual retainer otherwise payable to such DSU Participant in cash in the immediately succeeding period. The number of DSUs to be credited to a DSU Participant's account is determined by dividing: (a) the dollar amount of the portion of the DSU Participant's compensation to be paid as DSUs by (b) the fair value of the DSUs. Each DSU will vest on the award date, unless specified otherwise by the CHR&G Committee. DSUs are non-transferable and non-assignable.

DSUs, which are granted pursuant to the DSU Plan, track the value of the Common Shares. Although the DSUs are vested at the time of grant, they are not paid out until a Director departs from the Board, at which time they are paid out in cash equal to the number of DSUs held, multiplied by the price of the Common Shares at the time of retirement less required withholdings. Payout will occur within thirty (30) days following the date of retirement or death of a DSU Participant and, in any event, no later than the earlier of the 60^th day after the distribution date (as defined under the DSU Plan) and the end of the first calendar year commencing after the date of retirement or death. All dividends paid on the Common Shares are also paid to holders of DSUs through the issuance of additional DSUs.

Each DSU Participant is entitled to terminate or change his or her annual election, provided that they are not entitled to file more than one election notice in any calendar year unless specifically authorized by resolution of the Board. Upon death of a DSU Participant, any payment amount, less applicable withholdings, owed on DSUs granted under the DSU Plan will be paid to the deceased DSU Participant's estate prior to the final payment date (as defined under the DSU Plan).

In the event of any subdivision, consolidation, stock dividend, capital reorganization, reclassification, exchange, or other change with respect to the Common Shares, or a consolidation, amalgamation, merger, spin-off, sale, lease or exchange of all or substantially all of the property of the Company or other distribution of the Company's assets to Shareholders (other than the payment of dividends in respect of the Common Shares as contemplated under the DSU Plan), the account of each DSU Participant and the DSUs outstanding under the DSU Plan will be adjusted in such manner, if any, as the CHR&G Committee deems appropriate.

STATEMENT OF CORPORATE GOVERNANCE PRACTICES

Governance Philosophy

TransGlobe’s Board of Directors and management are committed to a high standard of corporate governance practices. The Company believes that strong governance is in the best interests of its Shareholders and promotes effective decision making at the Board level. The Company monitors Canadian, U.S. and UK regulations related to corporate governance, legal requirements and disclosure trends. As a Canadian corporation with Common Shares listed and/or quoted for trading on the TSX, NASDAQ and AIM, the Company is subject to Canadian rules and policies adopted by the TSX and Canadian Securities Administrators ("CSA"), as well as rules and listing standards applicable to "foreign private issuers" adopted by NASDAQ and the SEC, which includes provisions of the Sarbanes-Oxley Act of 2002 ("SOX") and the AIM Rules for Companies of the London Stock Exchange (March 2018) (the "AIM Rules") as amended from time to time.

This Statement of Corporate Governance Practices was approved by the Board and is made in accordance with National Instrument 58-101 - Disclosure of Corporate Governance Practices, which requires disclosure of the Company's approach to corporate governance. As noted above, TransGlobe considers Canadian corporate governance requirements, corporate governance rules and listing standards and applicable SEC and AIM Rules in determining its corporate governance practices. The Board of Directors has delegated responsibility to the CHR&G Committee, which is composed entirely of independent Directors, to oversee its corporate governance practices. The Company's corporate governance practices and policies are described more fully below.

The guidelines noted above as well as the Company's key governance policies are available in the corporate governance section of the Company's website at www.trans-globe.com.

Independence of the Board

The Board of Directors is responsible for determining whether or not each Director is independent.  NI 52-110 provides that a member is "independent" if the member has no direct or indirect material relationship with the issuer - a "material relationship" being one which could, in the view of the issuer's board of directors, reasonably interfere with the exercise of a member's independent judgment. NI 52-110 also specifically prescribes certain relationships that are considered to be material. Additionally, all independent Board members confirm their continued independence annually by completing a Director’s independence questionnaire.

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Based on the foregoing, the Board of Directors has determined that the following individuals are independent within the meaning of NI 52-110:  David Cook, Ross Clarkson, Jennifer Kaufield, Edward LaFehr and Timothy Marchant. Randy Neely is not independent within the meaning of NI 52-110. Mr. Neely is an Executive Officer of the Company.

The following table sets forth the members of each of the standing committees of the Board:

Note:

⁽¹⁾  The Disclosure and AIM Compliance Committee is comprised of Executive Officers only.

The independent Directors of TransGlobe hold meetings at which non-independent Directors and members of management are not in attendance, as required, and in conjunction with the regularly scheduled meetings of the Board of Directors. Five such meetings were held since the beginning of the Company's most recently completed financial year. The Audit Committee also meets regularly without any non-independent Directors present. Four such meetings were held in the most recently completed financial year.

The CHR&G Committee has the responsibility to ensure that the Board of Directors can function independently of management, including, without limitation, recommending to the Board of Directors mechanisms to allow Non-Executive Directors an opportunity to discuss the Company's affairs in the absence of management. Each of the Audit, CHR&G and RHSES Committees also meet regularly with only Non-Executive Directors present.

Serving on Other Boards

Currently, three of the Company’s independent Directors and two of the Company’s continuing independent Directors are also directors of other reporting issuers. See “Matters to be Acted Upon at the Meeting – Election of Directors”.  Directors are required to advise the Chair of the Board before accepting an invitation to sit on the board of another public company. If it is determined that a conflict of interest exists by serving on the board of another company, the Director is expected to act in accordance with the recommendation of the CHR&G Committee.

Interlocking Relationships

No TransGlobe Directors currently serve together on the same board of directors of any outside reporting issuer and as such no interlocking relationships exist.

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Board Evaluation and Renewal

The CHR&G Committee evaluates regularly the effectiveness and contribution of the Board, the Chair of the Board and the chair of each committee and the effectiveness and contribution of individual Directors, having regard for the mandate of the Board and position descriptions, attendance at Board and committee meetings, overall contribution and, in the case of individual Directors, the competencies and skills the individual Director is expected to bring to the Board. The Board has adopted an annual board questionnaire to assist in the assessment of the functioning of the Board as a whole, and through an annual self-assessment which are all submitted to the CHR&G Committee Chair. The results of the Board questionnaires are summarized and actions developed as results are reviewed with the whole Board. Meetings between the Chair of the Board and individual Directors are held to discuss results of the evaluation.

The Board has adopted a retirement policy for Directors. See "Corporate Policies – Retirement Policy for Directors". The Board has not adopted a formal policy on term-limits for members of the Board. The Company believes that its approach to Board evaluation and succession planning ensures adequate renewal.

Board Orientation and Continuing Education

The CHR&G Committee is responsible for overseeing the orientation of Directors new to the Board of Directors. The Board of Directors has adopted an Orientation Policy for new Directors. Under the Orientation Policy, a member of management (the President and Chief Executive Officer, the Vice President and Chief Operating Officer or the Vice President, Finance, Chief Financial Officer and Corporate Secretary) organizes an orientation program for newly elected Directors of the Company. The initial orientation includes a detailed briefing on all significant areas of the Company's operations by members of senior management. New Directors are provided with a comprehensive Board manual which contains a record of historical information about the Company, the charters of the Board and its committees and other relevant business information relating to the Company. All new Directors, within 24 months of becoming a Director are invited to visit the Company's main operations. COVID-19 related travel restrictions have temporarily halted plans for new Director in-country visits. Normal orientation travel is expected to resume as guidelines and best practices allow.

The Board of Directors has adopted a Continuing Education and Development Policy for Directors. Under the Continuing Education and Development Policy, continuing education is provided to Directors through regular presentations by senior management on the key areas of the Company's business. On an annual basis, Directors will attend a strategy meeting with senior management of the Company that provides for a comprehensive review of the Company's operations and include an in-depth discussion of the strategic plans of the Company for the coming year. In addition, the Company schedules reviews of various governance topics relevant to the Company, with area experts. These reviews may include, for example, best practices in corporate governance, human resources, risk management including hedging, credit and information technology and a review of major environmental and geopolitical issues. Each Director of the Company is expected to maintain the level of expertise necessary to perform his or her responsibilities as a Director. The Company provides a reasonable allowance for outside board education for each Director on an annual basis.

All Directors receive an extensive package of materials prior to each Board meeting. These materials provide a comprehensive summary of each agenda item to be discussed. Similarly, committee members also are provided with a comprehensive summary on each agenda item to be discussed at committee meetings.

Directors participate in numerous presentations regarding market conditions, governance and director liability.

Directors are made aware of corporate director-focused educational seminars offered by third-party professional organizations.

Board Mandate

The Company's Charter of Board of Director Governance is attached hereto as Schedule A. Responsibilities and duties of the Board of Directors, include:

The Board has developed written position descriptions or terms of reference for the Chair of the Board, the Chair of each standing committee of the Board which include terms of reference for the Chair for each of the Audit Committee, the CHR&G Committee, the RHSES Committee and for individual Directors. The Board has also developed charters for each standing committee of the Board.

Terms of Reference

Terms of Reference for the positions below are annually reviewed by the CHR&G Committee, with any updates or modifications approved by the Board. A summary of the general roles and responsibilities of the following positions are described below.

Chair of the Board

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Audit Committee Chair

CHR&G Committee Chair

RHSES Committee Chair

Individual Directors

President and Chief Executive Officer

Committees of the Board of Directors

The Board has four standing committees, each operating in accordance with a Board-approved written mandate.  This section provides a general review of each of the committees and their respective functions.

Audit Committee

The Audit Committee is comprised of three independent Directors.

Members:  Jennifer Kaufield (Chair), Ross Clarkson and Edward LaFehr

The Audit Committee is a committee of the Board of Directors appointed to assist the Board in monitoring (i) the integrity of the financial statements of the Company; (ii) compliance by the Company with legal and regulatory requirements related to financial reporting; (iii) qualifications, independence and performance of the Company's independent auditors; and (iv) performance of the Company’s accounting, internal controls and financial reporting process and monitoring business risks.

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The roles and responsibilities of the Audit Committee include the following:

Reserves, Health, Safety, Environment and Social Responsibility Committee

The Reserves, Health, Safety, Environment and Social Responsibility Committee (the "RHSES Committee") consists of three independent Directors.

Members:  Edward LaFehr (Chair), Ross Clarkson and Tim Marchant

The Board of Directors established the RHSES Committee to assist the Board in monitoring the integrity of the oil and gas reserves of the Company, compliance by the Company with legal and regulatory requirements related to reserves, qualifications, independence and performance of the Company's independent reserves evaluators, and the performance of the Company's procedures for providing information to the independent reserves evaluators and resources other than reserves reported by the Company.

The charter for the RHSES Committee includes the following responsibilities:

Compensation, Human Resources and Governance Committee

The Board's CHR&G Committee is comprised of three independent Directors.

Members:  Tim Marchant (Chair) and Jennifer Kaufield (Steven Sinclair was the third member of the committee until his retirement on March 25, 2022).

The roles and responsibilities of the CHR&G Committee include the following:

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Disclosure and AIM Compliance Committee

Members:  Randy Neely (Chair), Edward ("Eddie") Ok and Geoff Probert

The roles and responsibilities of the Disclosure and AIM Compliance Committee include the following:

Nomination of Directors

The CHR&G Committee, which is comprised of entirely independent Directors, oversees the nomination of Directors to the Board.  The CHR&G Committee may engage an outside consultant to assist in identifying qualified candidates for the Board. The nominees for Directors are initially considered and recommended by the CHR&G Committee, approved by the entire Board and appointed by the Company or Shareholders, as required.

CORPORATE POLICIES

Diversity

The Board of Directors has a Diversity Policy (the “Diversity Policy”) that pertains to Board nominations, Executive Officer appointments and employee hiring. The Board believes that Board nominations, Executive Officer appointments and employee hiring should be made on the basis of the skills, knowledge, experience and character of individual candidates and the requirements of the Board, management and staff at the time.

The Company believes that considering the broadest group of individuals who have the skills, knowledge, experience and character required to provide the leadership and skills needed to achieve our business objectives, without reference to their age, gender, race, ethnicity, sexual orientation, physical disability or religion, is in the best interests of the Company. The Board recognizes the benefits of diversity within the Board, management and the Company in general, and will encourage the consideration of women and other diverse candidates who have the necessary skills, knowledge, experience and character for Board nominations, Executive Officer appointments and employee hiring. For the foregoing reasons, the Board has not imposed any quotas or targets regarding the representation of women and other diverse candidates on the Board or in Executive Officer positions. For the purposes of the Diversity Policy, “diverse” and “diversity” means, with respect to individual candidates, age, gender, ethnicity, sexual orientation, personal abilities, religion, stakeholder perspective, geographic location and other factors considered relevant to the Board in this regard.

Specifically with respect to Board and Executive Officer diversity, to ensure the effectiveness of the Diversity Policy, the CHR&G Committee will review periodically the process of identifying female and other diverse candidates, the number of female and other diverse candidates considered or brought forward as potential nominees for Board positions and Executive Officer positions when the Board is looking to add additional Directors or officers (as applicable) or replace existing Directors or officers (as applicable) and the skills, knowledge, experience and character of any such female and other diverse candidates relative to other candidates to ensure that women and other diverse candidates are being fairly considered relative to other candidates. The CHR&G Committee will also review the number of women and other diverse candidates actually appointed and serving on the Board or in executive positions to evaluate whether it is desirable to adopt additional requirements or policies with respect to Board and Executive Officer diversity.

One out of seven (14%) of the Company's current Directors and one out of six (17%) continuing Directors are women and women hold nil out of 3 (0%) Executive Officer positions with the Company. The Board believes that its current membership has the expertise, skills, geographic representation, diversity, character and size to represent the interests of Shareholders and appropriately address the Company's business needs.

Non-Executive Director Share Ownership

On January 22, 2013, the Board of Directors adopted a mandatory Share Ownership Policy for Directors (the “Non-Executive Director Share Ownership Policy”) whereby Directors are required to acquire and hold Common Shares and/or DSUs with a minimum aggregate market value or original purchase cost or issued value of three times the annual retainer fee. Directors have a period of five years from the date of the implementation of the policy on January 22, 2013, or from the date of their appointment as a Director of the Company, whichever is later, to acquire the value required.

In May, 2018, the Non-Executive Director Share Ownership Policy was amended to specify that 50% of the share ownership requirement be held in Common Shares.  Directors have five years from the date of the policy amendment or five years from their appointment to meet this requirement. Messrs. Cook, Clarkson, LaFehr, and Marchant meet the Common Share requirements. Ms. Kaufield has until January 2027 to achieve the policy requirements.

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Directors are required to confirm annually, for the Company's management information circular, their beneficial Common Share ownership position and that the required ownership is not hedged or otherwise sold.

The following table provides each of the current Director’s ownership and compliance with the Non-Executive Director Share Ownership Policy as of March 23, 2022:

Notes:

⁽¹⁾  All DSUs vest immediately upon grant but cannot be redeemed until the Director ceases to be a Director of the Company.

⁽²⁾  Total Value is determined in accordance with the Share Ownership Policy for Directors: the greater of the current market value of Common Shares or Common Shares underlying the DSUs or the original purchase price of Common Shares owned or fair market value at the date of grant in the case of DSUs.

⁽³⁾  Based on three times the annual retainer effective January 1, 2021.

⁽⁴⁾ These values have been translated into U.S. dollars from Canadian dollars using the closing exchange rate of 1.2571 per U.S. dollar on March 23, 2022.

⁽⁵⁾  Jennifer Kaufield joined TransGlobe’s Board of Directors on January 1, 2022 and has until January 1, 2027 to achieve the Non-Executive Director Share Ownership Policy's requirements.

Retirement Policy for Directors

The Board of Directors has adopted a mandatory retirement policy. The Company's Directors are not permitted to stand for re-election to the Board of Directors once they have reached the age of 75. The Board of Directors reserves the right to deviate from the policy under extenuating circumstances. The CHR&G Committee has the responsibility to evaluate annually the qualification of each Director standing for re-election in the current year.

Retirement Policy for Executive Officers and Employees

The Board of Directors adopted a retirement policy for Executive Officers and employees of TransGlobe. Executive Officers and other employees are eligible for approved retirement when the individual has greater than or equal to 10 years of service with the Company and is older than 55 years of age. The Board of Directors reserves the right to deviate from the policy under extenuating circumstances.

Majority Voting Policy

The Company's Majority Voting Policy requires a Director receiving more "WITHHOLD" votes than "FOR" votes at any meeting of Shareholders in respect of which the number of nominees for Director is equal to the number of Directors to be elected, such nominee shall immediately tender his/her resignation to the Board of Directors. The Board shall consider the resignation within 90 days of the Shareholders meeting and will accept the nominee's resignation absent exceptional circumstances, having regard to all relevant matters, and a news release shall be provided to the TSX and promptly issued announcing its determination in respect thereof. If the Board determines not to accept the resignation, the news release must fully state the reasons for that decision. The nominee will not participate in any committee or Board of Directors deliberations on the resignation offer.  The Majority Voting Policy does not apply in circumstances involving contested Director elections.

Code of Business Conduct and Other Governance Policies

The Company has adopted a corporate code of conduct which is applicable to the Company, its employees and contractors (the "Corporate Code of Conduct"). A copy of the Corporate Code of Conduct has been posted to SEDAR at www.sedar.com, and to EDGAR at www.sec.gov and on the Company's website under AIM Rule 26.

The Corporate Code of Conduct is intended to guide employees and contractors activities to enhance value and to minimize situations where a conflict of interest could arise and where harm to the Company and its employees could occur. The Corporate Code of Conduct addresses responsibilities and values, insider trading, business relationships, entertainment, gifts and favours, compliance and monitoring. Adherence to the Corporate Code of Conduct is monitored by management through routine supervisory practices and an annual Corporate Code of Conduct disclosure and sign-off process. When an investigation results in a finding that the Corporate Code of Conduct has been breached, the employee or contractor who has breached the Corporate Code of Conduct may, depending upon the seriousness of the breach, be subject to discipline up to and including termination of employment.

The Company has also developed a specific code of conduct for its Directors and Officers (the "Code") (which is also available on SEDAR and EDGAR). The Code provides generally that each individual being considered for nomination as a Director must disclose to the CHR&G Committee all interests in relationships of which the Director is aware at the time of consideration which will or may give rise to a conflict of interest. If such an interest or relationship should arise while the individual is a Director, there is a positive onus on the Director to make disclosure of the same to the Corporate Secretary or the Chair of the Board. Each Director is also required by the Code to report any known or suspected breach of the Code to the Chair of the Board, and is annually required to review, sign and deliver to the Board Chair an executed copy of the Code.

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Pursuant to the Code, all Directors have agreed to the following guidelines respecting conflicts of interest:

Last, in accordance with the Business Corporations Act (Alberta), Directors who are a party to or are a director or an officer of a party to a material contract or material transaction, are required to disclose the nature and extent of their interest and are not permitted to vote on any resolution to approve the contract or transaction.

The Board provides leadership, supervision and support for the employees of the Company to uphold the principles articulated in the Corporate Code of Conduct.

Share Dealing and Insider Trading Policy

The Company has a Share Dealing and Insider Trading Policy in accordance with the requirements of the AIM that ensures the Company and its Directors, Officers, employees and consultants satisfy legal and ethical obligations related to proper and effective disclosure of corporate information and the trading of securities with that information.

The Share Dealing and Insider Trading Policy also contains an anti-hedging provision which includes a prohibition on Directors, Officers and employees purchasing financial instruments such as prepaid forward contracts, equity swaps, collars, or units of exchange funds that are designed to hedge their underlying position in Company shares.

Disclosure Policy

The Company has adopted a Disclosure Policy to ensure that communication to the public is done in a timely, factual and accurate manner as well applicable to legal and regulatory requirements. The Disclosure Policy extends to all employees and contractors of the Company, its Board of Directors, and those authorized to speak on behalf of the Company. Annually, all employees and contractors of the Company are required to attend a policy review meeting at which the Disclosure Policy is discussed. The Disclosure and AIM Compliance Committee meets a minimum of two times a year or as needed to review and plan upcoming disclosure obligations.

Anti-Bribery and Corruption Policy

The Company adopted an Anti-Bribery and Corruption Policy in May 2018.  The Anti-Bribery and Corruption Policy sets out TransGlobe's responsibilities, and of those working for the Company, in observing and upholding the Company's position on bribery and corruption. As well the Anti-Bribery and Corruption Policy provides information and guidance to those working for the Company on how to recognize and deal with bribery and corruption issues.

Report from the Disclosure and AIM Compliance Committee

The Disclosure and AIM Compliance Committee meets and reports to the Board of Directors semi-annually.  The Committee’s mandate includes the review of disclosure requirements, Company policies, multiple exchange rules, reporting requirements and changes to legislation and regulations in applicable jurisdictions.

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EXECUTIVE COMPENSATION

LETTER TO SHAREHOLDERS

To Shareholders:

The Compensation, Human Resources and Governance Committee ("CHR&G Committee”) and Board of Directors believe in providing clear and transparent disclosure to help our Shareholders understand the compensation of our Executives as well as the rationale behind our compensation decisions. This letter to Shareholders outlines our strategy and objectives, our performance in 2021, and how this performance informed and guided pay decisions during the year. A more detailed description of our compensation programs and decisions can be found under "Compensation, Discussion & Analysis" following this letter.

Our Strategy

TransGlobe’s corporate strategy is to build long-term Shareholder value through the profitable acquisition, development and exploitation of oil and gas assets with a focus on under-developed or brownfield opportunities. Our efforts have historically been principally focused on the Middle East and North Africa (MENA) region.  In late 2016 we acquired Canadian assets to leverage our operational, administrative and managerial competencies while balancing the portfolio. The Company continues to invest in profitable, advantaged projects while considering the transition to a lower carbon economy.  The Company continues to identify and evaluate acquisitions that leverage our core competencies of rigorous operational excellence and government relations in the greater MENA region.

2021 Performance: In 2021 the Company concluded the most significant commercial success of its 15 plus year history in Egypt.  Several years ago, the management team recognized that, with lower oil prices and limited life remaining on its most productive assets in Egypt, it would quickly run out of investible projects and simultaneously isolate historic costs from the production capable of recovering them.  Instead of accepting that path, the management team, with the support of its leadership team in Egypt and technical team in Calgary, executed a strategy to consolidate, amend and extend the Company’s Egyptian Eastern Desert production sharing contracts ("PSCs").  Board members recognize that this historic agreement was reached with our Egyptian Government partners through perseverance, patience and above all creativity.  

In Canada the Company’s drilling program further confirmed the productive capacity and significant cash flow potential of its South Harmattan, Alberta acreage.  The three wells drilled in the northern portion of this land holding all resulted in wells which met or exceeded pre-drill expectations.  

Financially, the Company paid off the remaining balance on the 2017 Mercuria Prepay Agreement and ended the year on a strong financial footing.  Operating expenses and general and administrative expenses were well controlled through the year, in spite of a dramatically increasing inflationary environment as pandemic restrictions rolled off.   The Board believes the strategic achievements by management and the Company in 2021 were as significant as any achieved historically while continuing to maintain our conservative approach to balance sheet management.  

2021 Pay Decisions

The Board, on recommendation from the CHR&G Committee considers both corporate and individual performance in making its pay decisions each year. The following decisions were made during the year ended December 31, 2021:

Base Salaries: With the recovery of oil prices and the operational progress to managing the business within a pandemic setting, the Board approved a return of all base salaries to pre-pandemic levels but otherwise there were no pay raises given for the 5^th consecutive year.  

Short-term Incentive Plan (STIP):  The CHR&G Committee recommended, and the Board approved a STIP corporate score of 1.59 reflecting the outperformance on most measures by the Company in 2021. For a more detailed discussion of the STIP see "Compensation Discussion & Analysis – Components of Compensation – Short-Term Incentive Plan".

Long-term Incentive Plan:  In 2021, LTIP grants were awarded at 100% of target and comprised of 25% Options and 75% PSUs.  The PSU performance measure of relative total shareholder return (“TSR”) (0-2x) is paid out based on peer group positioning (p25-p75) and is capped at a multiplier of 0.75 should absolute TSR be negative over the three-year performance period. For a more detailed discussion of the LTIP see "Compensation Discussion & Analysis – Components of Compensation – 2021 Long Term Incentive Plan".

President and Chief Executive Officer Compensation:  Mr. Neely's performance was assessed by the full Board on the achievement of 2021 corporate and President and Chief Executive Officer objectives. Mr. Neely’s compensation in 2021 was directly tied to corporate performance with 70% of his TDC (as defined herein) at-risk. In 2021 Mr. Neely’s salary was returned to pre-pandemic levels (i.e. the temporary 10% reduction was eliminated) but no other adjustment was made. The LTIP grant was issued at 100% of target.  On a STIP basis, Mr. Neely’s personal performance was rated as above-expectations, reflecting the significant multi-year effort that was undertaken to ultimately succeed at having the Merged Concession Agreement ratified by the Egyptian Parliament.   As a result, his STIP award was calculated based on his personal performance rating of 1.0 and a STIP corporate scorecard score of 1.59.

Director Compensation:  The members of the Board also had the temporary pandemic-related reduction of their annual retainer removed.  

Compensation and Alignment to Performance

The Board remains confident that TransGlobe’s compensation program will enable the Company to attract, motivate and retain top talent and is well aligned to the interests of Shareholders. We highlight the following elements:

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2021 Compensation Review

Consistent with the Company's efforts to control G&A expenditures in 2021, the CHR&G Committee did not engage a compensation advisor for 2021 compensation.  Rather it drew on its internal depth of experience and the exposure of its members to key considerations arising as a result of the pandemic to assist in making compensation decisions in 2021. The CHR&G Committee decided that a full review of the executive compensation scheme was warranted for 2022 and engaged a compensation consultant in late 2021 to assist.  

2022 Compensation Decisions Made

Given the significant improvement of the price of oil, the substantially improved economics and opportunity set within the Company's Egyptian Eastern Desert portfolio and a gradual return to more normalized operations, decisions made during the year to date relating to 2022 executive compensation include:

Shareholder Engagement

The Board and Executives, maintain an active dialog with our significant shareholders to solicit regular feedback.  The feedback obtained through that engagement is carefully considered in our 2022 decisions to date and will also assist in future compensation construct decisions.  

Conclusion

We trust that our approach to compensation programs further demonstrates our commitment to a pay-for-performance compensation philosophy. In 2020 our shareholders had experienced a difficult investment climate through the early stages of the COVID-19 pandemic and the collapse in commodity prices. In 2021, our shareholders have experienced a significant increase in the value of the Company’s equity value as a direct result of management completing the Merged Concession Agreement. The Board would like to thank the entire Leadership team for their diligence and hard work over the last two difficult years and congratulate them on delivering the most important commercial agreement in the Company’s history.

The Committee will continue to evaluate current and evolving best practices and will act to modify our policies for 2022 if necessary. We encourage you to engage with us on our approach to compensation and with any related questions, you may have by emailing us at boardofdirectors@trans-globe.com.

On behalf of the Board of Directors, we thank you for taking the time to read our disclosure.

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Notes:

See "2021 PSU Grant", and "2021 Stock Option Grant" for details relating to the determination of fair value PSUs and Options granted. These values have been awarded in Canadian dollars and paid in U.S. dollars and are translated into U.S. dollars using the exchange rate in effect on the respective grant dates (March 20, 2019 - 1.3317; May 22, 2020 – 1.4015; March 19, 2021 - 1.2506).

The fair value of the grant of PSUs was determined based on the five day weighted average prior to grant date. This approach to valuing the PSUs granted is consistent with the manner in which PSU grants are valued for the Company's financial statements which is in compliance with IFRS.

The following table summarizes the fair value of the annual PSU grants and reinvested dividends for each NEO:

The actual amount of PSUs to be received at maturity from reinvested dividends will be determined in the same manner as original awards, described herein on page 40.

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Options Exercised During the Year Ended December 31, 2021

As at December 31, 2021 there were 3,083,249 Options outstanding under the Company's Option Plan representing approximately 4% of the outstanding Common Shares. In total, 1,228,967 Options were "in-the-money" at December 31, 2021 (567,303 Options granted March 19, 2019 and 661,664 Options granted May 21, 2020).  There were 402,115 Options granted in 2021 or approximately 1.1% of the outstanding Common Shares at December 31, 2021.  In 2020 there were 819,106 Options granted or approximately 1.1% of the outstanding Common Shares at December 31, 2020.

Mr. Neely and Mr. Ok exercised 420,122 and 130,435 Stock Options respectively on December 27, 2021. Mr. Clarkson exercised 355,200 Stock Options on December 29, 2021.

Employment Agreements

The Company entered into Executive Employment Agreements (each an "Employment Agreement" and together the "Employment Agreements") with all of the NEOs effective the dates noted below:

These Employment Agreements cover the various aspects of their duties and cover subjects such as compensation components, termination of employment, non-solicitation, and confidentiality.

Termination Compensation

Each of the Employment Agreements may be terminated by the Executive Officer on two months' written notice.

If a NEO is terminated without cause the Company will pay them an amount equal to 24 months of their then current salary, an amount equal to 10% of the above amount in lieu of benefits, a pro-rata payout of outstanding PSUs at the deemed performance multiplier, and all unvested Options granted to the NEO that will vest in the two years after termination will immediately vest and will be exercisable for 30 days.

On January 11, 2018, Messrs. Neely and Ok signed Employment Agreements and on March 11, 2019, Geoff Probert signed an Employment Agreement that each contain a double trigger provision for change of control and good reason provisions. If a NEO should die during the term of the Employment Agreement, the Company is required to pay his estate an amount equal to six months of his then current salary. The Employment Agreements also provide for the customary medical, dental and life insurance benefits and vacation entitlement.

If a NEO is terminated for just cause, the Company will only pay the NEO the pro-rata amount for services up to and including the termination date at the NEO's then current salary, plus any accrued and unused vacation pay and reimbursable expenses.

The Employment Agreements each contain an evergreen confidentiality provision, a one year non-competition provision and a six month non-solicitation provision.

Termination of employment provisions are in place for each NEO under their respective Employment Agreements.

Notes:

⁽²⁾    In the event of a change of control, the Board will undertake to negotiate a rollover of PSUs to like instruments of the acquirer. If that is not achievable the PSUs will vest in accordance with performance requirements (as applicable to PSUs) and be payable within 55 days of the change

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of control. In the event of a Not for Cause termination, the following amounts would be due under the PSU plan to each executive: Randy Neely - $2,370,394; Eddie Ok - $1,180,765; Geoff Probert - $1,422,585.

⁽³⁾    These values have been translated into U.S. dollars from Canadian dollars using the closing exchange rate of 1.2678 per U.S. dollar on December 31, 2021.

⁽⁴⁾    This value has been translated into U.S. dollars from British pound sterling using the closing exchange rate of 0.7420 per U.S. dollar on December 31, 2021.

⁽⁵⁾   Termination payments include in aggregate $220,577 of amounts associated with any accrued and unused vacation pay.

Compensation Risk Management

The CHR&G Committee, with assistance from the Board monitors the risks associated with the Company’s compensation programs. The CHR&G Committee concluded that the Company’s compensation programs do not create an environment where Executive Officers or employees would be encouraged to take excessive risk that could have a material adverse impact on the Company.

The Board believes that, among other facts, the following elements of the compensation programs help to discourage inappropriate risk-taking. In addition to the following list, the CHR&G Committee conducts scenario testing and stress testing of compensation program elements to ensure proper alignment of incentive programs while continuing to allow for the use of informed judgment.

The CHR&G Committee continues to monitor and review emerging market programs and practices related to risk management of compensation practices.

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Notes:

⁽¹⁾  Represents outstanding Options at December 31, 2021. In 2022, the Board determined to allow the Option Plan to lapse and will not be seeking the requisite three year approval under TSX policies for unallocated Options under the Option Plan at the Meeting. Accordingly, no further grants can be made under the Option Plan after May 10, 2022. Previously allocated Options will be unaffected and will continue in accordance with their terms.

⁽²⁾  The Company's DSUs, (which are issuable only to Directors and not employees or Executive Officers), RSUs and PSUs can only be settled in cash.

⁽³⁾ Option exercise prices are reported in Canadian dollars, being the currency in which the Options are granted.

2022 Compensation Decisions Made

The CHR&G Committee continues to seek out opportunities to strengthen the Company's alignment with best practices in compensation and good governance and has carefully considered the feedback gathered from its shareholder outreach efforts. In 2022 the Committee contracted an HR consultant to provide a complete review of the Company’s executive compensation scheme in order to assess current positioning in the market.  The Board determined from that work that executive salaries were below the target of the 50^th percentile and made adjustments to the three executive's salaries. The Board approved a LTIP construct comprised of 75% PSUs and 25% RSUs and a target grant.  The Board approved the use of two PSU performance measurement metrics including relative TSR with a 0 to 2 times payout based on peer group positioning and an absolute TSR metric whereby payout will be capped at a 0.75 multiplier should absolute TSR be negative over the performance period. The PSU Performance Peer group was maintained with a majority of companies with primarily international operations and adjusted for companies that have subsequently been acquired.

In addition, on March 16, 2022, the Board determined to allow the Option Plan to lapse and will not be seeking the requisite three year approval under TSX policies for unallocated Options under the Option Plan at the Meeting. Accordingly, no further grants can be made under the Option Plan after May 10, 2022. Going forward, 100% of the Company's LTIP will be in the form of cash awards represented by RSUs and PSUs under the PSU Plan and RSU Plan, respectively, in order to enhance the long-term alignment of such awards with key performance metrics and ensure continued alignment with Shareholder interests.